Are monopolies economically efficient? Consider the market to the right. Compared to the perfectly competitive outcome, what w
ould be the change in surplus if instead the market had one supplier that was a monopoly? Use the triangle drawing tool to shade in the change in surplus. Properly label this shaded area. Carefully follow the instructions above, and only draw the required objects.
1 answer:
Answer:
No monopoly is not economically efficient
Explanation:
Monopolies are not economically efficient compared to perfect competition, because in perfect competition the firms will set a particular cost for a product that is accessible to all customers. The supply of the commodity will be less, and the cost will be higher if the market had only one supplier. The economic gains are higher in perfect competition because the total gains from the commodity are far less in monopoly compared to perfect competition.
You might be interested in